This construction is known as the “square ice” model, because in statistical mechanics it can be used to model ice (as in normal physical ice, made from water). The vertices correspond to oxygen atoms, each of which is bonded to four hydrogen atoms that lie “within” the bonds of the lattice (and each hydrogen atom is thus bonded to two oxygen atoms). The hydrogen atoms are not positioned symmetrically along the bonds, but are closer to one of their oxygen atoms than the other one; the arrow on each bond of the lattice points to the closest oxygen atom for that bond’s hydrogen atom.
OK, here’s the pretty picture, i.e. the embroidered loop diagram corresponding to the permutation matrix [16, 15, 13, 12, 19, 22, 9, 23, 26, 8, 6, 29, 30, 5, 31, 32, 1, 2, 28, 3, 4, 27, 25, 7, 10, 24, 11, 14, 21, 20, 18, 17]. The small white stitches mark the non-zero matrix entries where the arrows on the lattice change direction and hence the corresponding stitch is twice as long as usual.